<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 10-Q/A
-----------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
COMMISSION FILE NUMBER O-20418
KENNEDY-WILSON, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4364537
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
530 WILSHIRE BOULEVARD, #101 90401
SANTA MONICA, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(310) 314-8400
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
-----------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements of the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: Common Stock, $.01 par value;
3,978,797 shares outstanding at June 30, 1998.
================================================================================
<PAGE> 2
KENNEDY-WILSON, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q/A
JUNE 30, 1998
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I. Financial Information.............................................................................. 3
Item 1. Financial Statements:
Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997........................ 3
Consolidated Statements of Operations for the Three Months Ended June 30, 1998 and 1997
And for the Six Months Ended June 30, 1998 and 1997.......................................... 4
Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 1998 and 1997....................................................................... 5
Notes to Consolidated Financial Statements................................................... 6-8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations......... 9
Part II. Other Information................................................................................. 10
Item 1. Legal Proceedings............................................................................. 10
Item 2. Changes in Securities......................................................................... 10
Item 3. Defaults Upon Senior Securities............................................................... 10
Item 4. Submission of Matters to a Vote of Security Holders........................................... 10
Item 5. Other Information............................................................................. 10
Item 6. Exhibits and Reports on Form 8-K.............................................................. 11
</TABLE>
2
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
KENNEDY-WILSON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
JUNE 30, DECEMBER 31,
1998 1997
-------------- --------------
(unaudited)
<S> <C> <C>
Cash and cash equivalents $ 4,374,000 $ 10,448,000
Cash - restricted 642,000 174,000
Accounts receivable - other 3,057,000 1,018,000
Notes receivable 21,334,000 9,546,000
Real estate held for sale 74,479,000 18,628,000
Investments with related parties and non-affiliates 7,658,000 4,899,000
Other assets 1,707,000 1,005,000
-------------- --------------
TOTAL ASSETS $ 113,251,000 $ 45,718,000
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable $ 530,000 $ 666,000
Accrued expenses and other liabilities 2,765,000 4,553,000
Notes payable 18,067,000 4,764,000
Borrowing under lines of credit 9,489,000 9,039,000
Mortgage notes payable 69,512,000 15,102,000
-------------- --------------
Total liabilities 100,363,000 34,124,000
-------------- --------------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 2,000,000 shares authorized
none issued -- --
Common stock $.01 par value; shares authorized; 10,000,000 40,000 39,000
shares issued: 3,978,797 in 1998 and 4,126,579 in 1997
Additional paid-in capital 23,853,000 23,788,000
Accumulated deficit (10,037,000) (10,913,000)
Notes receivable from stockholders (968,000) (1,320,000)
-------------- --------------
Total stockholders' equity 12,888,000 11,594,000
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 113,251,000 $ 45,718,000
============== ==============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
KENNEDY-WILSON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Commissions $ 1,592,000 $ 1,407,000 $ 3,734,000 $ 2,125,000
Sales of residential real estate 2,094,000 545,000 2,277,000 2,480,000
Equity in income of investments with related parties
and related parties 205,000 156,000 473,000 497,000
Gain on sale of commercial real estate -- -- -- 1,682,000
Gain on restructured notes receivable 942,000 1,151,000 1,597,000 1,619,000
Rental income, net 1,185,000 356,000 1,864,000 926,000
Interest income 278,000 139,000 529,000 243,000
Other income 163,000 212,000 382,000 264,000
------------ ------------ ------------ ------------
TOTAL REVENUE 6,459,000 3,966,000 10,856,000 9,836,000
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Commissions and marketing expenses 152,000 141,000 257,000 289,000
Cost of residential real estate sold 1,647,000 485,000 1,778,000 2,297,000
Compensation and related expenses 1,106,000 1,195,000 2,326,000 2,216,000
General and administrative 1,005,000 1,018,000 1,997,000 2,038,000
Depreciation and amortization 447,000 188,000 611,000 445,000
Interest expense 1,864,000 740,000 2,877,000 1,716,000
------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 6,221,000 3,767,000 9,846,000 9,001,000
------------ ------------ ------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES
AND BEFORE EXTRAORDINARY ITEM 238,000 199,000 1,010,000 835,000
Provision for income taxes 36,000 50,000 134,000 100,000
------------ ------------ ------------ ------------
INCOME BEFORE EXTRAORDINARY ITEM 202,000 149,000 876,000 735,000
Extraordinary item - Gain on debt extinguishment -- 288,000 -- 288,000
------------ ------------ ------------ ------------
NET INCOME $ 202,000 $ 437,000 $ 876,000 $ 1,023,000
============ ============ ============ ============
Basic income per share before extraordinary item $ 0.05 $ 0.04 $ 0.22 $ 0.18
Basic net income per share $ 0.05 $ 0.11 $ 0.22 $ 0.24
Basic weighted average shares 3,969,962 4,050,180 3,959,970 4,179,492
Diluted income per share before extraordinary item $ 0.05 $ 0.04 $ 0.21 $ 0.17
Diluted net income per share $ 0.05 $ 0.11 $ 0.21 $ 0.24
Diluted weighted average shares 4,177,037 4,101,062 4,151,504 4,225,998
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
KENNEDY-WILSON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------------
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 876,000 $ 1,023,000
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Depreciation and amortization 611,000 445,000
Equity in income in partnerships (473,000) (497,000)
Gains on sales of real estate (499,000) (1,877,000)
Gains on restricted notes receivable - non-cash (644,000) (446,000)
Change in assets and liabilities:
Accounts receivable - other (2,039,000) (180,000)
Other assets (702,000) (99,000)
Accounts payable (136,000) (613,000)
Accrued expenses and other liabilities (1,788,000) (410,000)
------------ ------------
Total adjustments (5,670,000) (3,677,000)
------------ ------------
Net cash used in operating activities (4,794,000) (2,654,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture, fixtures and equipment -- (97,000)
Purchase and additions to real estate held for sale (58,240,000) (2,812,000)
Proceeds from sales of real estate held for sale 2,277,000 12,030,000
Additions to notes receivable (14,845,000) (404,000)
Payments of notes receivable 4,053,000 --
Distribution from partnerships 1,993,000 130,000
Investment in partnerships (4,279,000) (969,000)
Extraordinary item -- (288,000)
------------ ------------
Net cash (used in) provided by investing activities (69,041,000) 7,590,000
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of mortgage notes payable 55,462,000 3,308,000
Repayment of mortgage notes payable (1,052,000) (6,031,000)
Borrowings under lines of credit 10,574,000 7,051,000
Repayment of lines of credit (10,124,000) (6,346,000)
Borrowings under notes payable 16,640,000 1,617,000
Repayment of notes payable (3,337,000) (2,443,000)
Cash - restricted (468,000) 76,000
Repurchase of common stock 66,000 (1,320,000)
------------ ------------
Net cash provided by (used in) financing activities 67,761,000 (4,088,000)
------------ ------------
Net (decrease) increase in cash (6,074,000) 848,000
CASH, BEGINNING OF PERIOD 10,448,000 1,901,000
------------ ------------
CASH, END OF PERIOD $ 4,374,000 $ 2,749,000
============ ============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
KENNEDY-WILSON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
UNAUDITED
NOTE 1 - FINANCIAL STATEMENT PRESENTATION
The above financial statements have been prepared by Kennedy-Wilson,
Inc. a Delaware corporation, and subsidiaries (the Company) without audit by
independent public accountants, pursuant to the Rules and Regulations of the
Securities and Exchange Commission. The statements, in the opinion of the
Company, present fairly the financial position and results of operations for the
dates and periods indicated. The results of operations for interim periods are
not necessarily indicative of results to be expected for full fiscal years.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the Rules and Regulations of the
Securities and Exchange Commission. The Company believes that the disclosures
contained in the financial statements are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
Certain reclassifications have been made to prior year balances to
conform to the current year presentation.
NOTE 2 - NOTES RECEIVABLE
In March 1998, the Company acquired a note receivable secured by a
3,000-acre parcel of land on Hawaii's Kohala Coast for approximately $4.2
million.
In June 1998, the Company acquired two notes receivable secured by a
1,000-acre parcel and a 450-acre parcel of land in Hawaii for approximately $2.5
million and $1.4 million respectively.
In May 1998, the Company purchased a portfolio of non-performing loans
for approximately $2.1 million.
In June 1998, the Company purchased another portfolio of non-performing
loans for approximately $2.8 million.
NOTE 3 - REAL ESTATE HELD FOR SALE
In January 1998, the Company purchased the vacant lot adjacent to the
1304 15th Street building that it owns in Santa Monica, CA for $600,000.
In January 1998, the Company purchased a 75,000 square foot office
building in Van Nuys, CA for approximately $6.6 million.
In January and February 1998, the Company purchased two residential
homes in Pacific Palisades, CA for $527,000 and $612,000 respectively.
In February 1998, the Company purchased a 278,000 square foot office
building in downtown Los Angeles, CA for approximately $24.5 million.
In March 1998, the Company purchased 23 lots zoned for residential
units in Palm Desert, CA for $1.5 million.
In March 1998, the Company acquired a 131,750 square foot office
building located in Los Angeles, CA for approximately $13 million.
6
<PAGE> 7
KENNEDY-WILSON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
UNAUDITED
In April 1998, the Company purchased a 24 unit residential building in
West Los Angeles for approximately $4.3 million. The purchase was financed with
a mortgage note for approximately $3.7 million.
NOTE 4 - NOTES PAYABLE
The May 1998 purchase of non-performing loans mentioned above was
financed with a draw on one of the Company's lines of credit and a loan for
$800,000 with an interest rate of Prime plus 2% with a maturity date of January
23, 1999.
The June 1998 purchase of non-performing loans was financed with a note
payable with an interest rate of 12% and a maturity date of September 1998.
In June 1998, the Company entered into a loan agreement that provides
the Company with $10 million with an interest rate of 12% and a maturity date of
December 3, 1998.
NOTE 5 - MORTGAGE NOTES PAYABLE
The January 1998 purchase of the lot adjacent to the 1304 15th Street
building referred to above was financed by a mortgage note totaling $450,000.
The note has an interest rate of Prime plus 1% and a maturity date of January 1,
2000 and is secured by the aforementioned property.
The January 1998 purchase of the 75,000 square foot office building in
Van Nuys, CA was financed by a mortgage note of approximately $5.5 million and a
third party equity investment of approximately $1.5 million. The mortgage note
has an interest rate of Prime and a maturity date of January 31, 2001. The
equity investment has an interest rate of Prime plus 4% and a maturity date of
January 23, 2001 and is secured by the aforementioned property.
The January and February 1998 purchases of two residential homes
referred to above were financed by a mortgage note totaling approximately $1.1
million with an interest rate of Prime plus 1.5% and a maturity date of March
19, 1999 and is secured by the aforementioned property.
The February 1998 purchase of a 278,000 square foot office building in
downtown Los Angeles was financed with a mortgage note in the amount of $19
million and a third party equity investment of approximately $4.6 million. The
mortgage note is structured as a senior note of $11 million with an interest
rate of LIBOR plus 2.5% and a junior note of $8 million with an interest rate of
LIBOR plus 4.875%. Both notes have a maturity date of February 28, 2003. The
equity investment has an interest of LIBOR plus 4% and maturity date of February
25, 2001 and is secured by the aforementioned property.
The February 1998 purchase of 23 lots referred to above was financed by
a mortgage note of approximately $1.1 million. The note has an interest rate of
Prime plus 1.25% and a maturity date of March 1, 1999 and is secured by the
aforementioned property.
The March 1998 purchase of the 131,750 square foot office building in
Los Angeles was financed with a mortgage note in the amount of $10 million and a
third party equity investment of approximately $2.4 million and is secured by
the aforementioned property. The note has an interest rate of LIBOR plus 3.5%.
The equity investment has an interest rate of LIBOR plus 4%. Both notes have a
maturity date of March 31, 2001.
7
<PAGE> 8
KENNEDY-WILSON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
UNAUDITED
The April 1998 purchase of the 24 unit residential building in West Los
Angeles was financed with a mortgage note for approximately $3.7 million. The
note has an interest rate of Prime plus 1% and a maturity date of March 15,
1999.
NOTE 6 - INVESTMENTS IN AFFILIATES AND PARTNERSHIPS
In January 1998, the Company acquired a 15% interest in a joint venture
("60 Broad Street"), with a related party, which owns a commercial property with
approximately 977,000 square foot of rental space, located in Manhattan, New
York. The Company's investment at March 31, 1998 was approximately $3.7 million.
In March 1998, the Company acquired 40% interest in a joint venture
("Beverly Crescent, LLC"), with a related party, which owns a note
collateralized by a hotel in Beverly Hills, CA. The Company's investment at
March 31, 1998 was approximately $300,000. In May 1998, the Company sold its
interest in the note and recorded a gain of approximately $298,000.
NOTE 7 - STOCKHOLDERS' EQUITY
In March 1998, the Company declared a 3 for 1 stock split in the form
of a 200% stock dividend. The stock dividend was payable to holders of record as
of March 30, 1998, and was paid in April 1998. All historical share and per
share amounts have been retroactively restated to reflect the dividend.
In April 1998, the stockholders of the Company approved an increase in
its authorized shares from 6,000,000 to 12,000,000, consisting of 10,000,000
shares of common stock and 2,000,000 shares of preferred stock.
NOTE 8 - RELATED PARTY TRANSACTIONS
Commission revenue has been reduced by $150,000 for consulting fees
paid to a director of the Company in connection with a lease transaction.
NOTE 9 - SUBSEQUENT EVENTS
In July 1998, Colony Investors III, LP acquired a 10 percent equity
position in the Company. The purchase involved a private placement sale of
440,085 shares of the Company's Common Stock and warrants exercisable for seven
years to purchase an additional 132,026 shares of the Company's Common Stock,
generating $5.2 million in proceeds. This transaction was reported on a Form
8-K filed with the Securities and Exchange Commission on July 31, 1998.
In July 1998, the Company acquired from Heitman Financial Ltd., a
wholly owned subsidiary of United Asset Management Corporation, all of the
outstanding shares of Heitman Properties, Ltd., a property management company.
The Company financed the acquisition with subordinated debt of approximately
$21 million. The acquisition adds 52 million square feet to the portfolio of
properties managed by the Company. This transaction was reported on a Form 8-K
filed with the Securities and Exchange Commission on July 31, 1998.
In August 1998, the Company sold the 24 unit residential building in
West Los Angeles for approximately $5.4 million. The Company is anticipating
recording a gain of approximately $600,000.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997.
Revenue for the three months ended June 30, 1998 increased 63% compared
to the three months ended June 30, 1997. The increase was a result of an
increase in sales of residential real estate of 284% compared to the second
quarter of 1997 and an increase of 233% in rental revenue. Sales of residential
real estate for the quarter ended June 30, 1998 included significant sales from
a project in Granada Hills, California. There were no such sales in the second
quarter of 1997. Rental revenue increased due to the larger commercial property
portfolio of approximately 604,000 square feet in 1998 as compared to the
245,000 square feet in 1997.
Operating expenses increased 65% for the quarter ending June 30, 1998.
The increase was mainly due to the 240% increase in cost of residential real
estate sold due to higher sales as discussed above. Also, the debt incurred by
the Company to finance its commercial property portfolio generated a 152%
increase in interest expense.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997.
Revenue for the six months ended June 30, 1998 increased 10% compared
to the six months ended June 30, 1997. The increase was due primarily to
increased commission revenue from increased brokerage closing, including the
sale of two large office buildings in Oakland, CA and one in Tokyo, Japan and a
101% increase in rental income due to a larger commercial property portfolio as
compared to the same period in 1997 which more than made up for the fact that
there were no sales of commercial properties during the first six months ended
June 30, 1998.
Operating expenses increased 9% for the six months ended June 30, 1998.
The increase was mainly due to the 68% increase in interest expense on debt
incurred by the Company to finance its larger commercial property portfolio.
The increase is offset by a 77% decrease in cost of residential real estate
sold.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes that its cash balance of approximately $4.4
million at June 30, 1998, combined with cash generated from operations and the
$15 million from one of its lines of credit, will provide funds sufficient to
meet its present and reasonably foreseeable obligations.
The Company's activities as a principal in real estate and notes
receivable acquisitions requires larger capital resources than is required by
its marketing and brokerage operations. As a result, the Company may
periodically need to obtain third party financing for such transactions. The
Company has been successful in obtaining such financing as needed at competitive
terms, and expects to be able to continue to do so in the future.
FORWARD LOOKING STATEMENTS
Management's Discussion and Analysis of Financial Conditions and
Results of contains certain forward-looking statements that are subject to risk
and uncertainty. Investors and potential investors in the Company's securities
are cautioned that a number of factors could adversely affect the Company's
ability to obtain these results, including (a) the inability to lease currently
vacant space in the Company's properties; (b) the inability of tenants to pay
contractual rent and other expenses; (c) bankruptcies of tenants; (d) increases
in certain operating costs at the Company's properties; (e) decreases in rental
rate available from tenants leasing space in the Company's properties; (f)
unavailability of financing for acquisitions, development and redevelopment of
properties by the Company; (g) increases in interest rates; and (h) a general
economic downturn resulting in lower rents, rent delinquencies, and other
downward pressure on commissions, occupancies and rents at properties.
9
<PAGE> 10
PART II - OTHER INFORMATION
Items 1, 3, 4 and 5 are omitted as not applicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Pursuant to a Loan and Warrant Agreement dated June 3, 1998 between
the Company and FBR Asset Investment Corporation ("FBR"), the Company issued
a promissory note bearing interest at 12% per annum and in the aggregate
principal amount of up to $10,000,000 (the "Promissory Note") and agreed to
issue a warrant (the "Warrant") to purchase shares of common stock of the
Company ("Common Stock"). FBR advanced to the Company $5 million on June 3,
1998 and $5 million on June 9, 1998. The Promissory Note matures on the earlier
of December 3, 1998 and the date on which an underwritten public offering of
shares of Common Stock (a "Public Offering") is consummated.
The Warrant is to be issued on the business day following the earlier
of (i) the date on which the Promissory Note is due and (ii) the consummation
of a Public Offering. The number of shares of Common stock covered by the
Warrant shall be the following percentage of the Common Stock outstanding on a
fully diluted basis on the date the Warrant is issued (without giving effect to
the issuance of the Warrant):
<TABLE>
<CAPTION>
Warrant Issue Date Occurs Percentage of Shares Outstanding
------------------------- --------------------------------
<S> <C>
On or before September 3, 1998 0.50%
After September 3, 1998 and before
December 4, 1998 1.00%
After December 4, 1998 2.00%
</TABLE>
If the Company consummates a Public Offering on or before December 3,
1998, the per share purchase price paid on the exercise on the Warrant shall be
the public offering price of the Common Stock in the Public Offering. If a
Public Offering is not so consummated, the per share purchase price shall be
the average of the closing prices for a share of Common Stock on NASDQ for the
20 business days preceding December 4, 1998. The Warrants shall expire on the
fifth anniversary of the date the Warrants are issued.
The advances made by FBR in connection with the Note and Warrant were
used to acquire notes secured by real property. The sale of the Promissory Note
and the Warrant are exempt from registration under the Securities Act of 1933
as amended (the "Act") under Section 4(2) thereof. The securities were not
offered to any person other than FBR. FBR represented that it was an
"accredited investor" within the meaning of the Regulation D under the Act and
that it was acquiring the Promissory Note and would acquire the Warrant and any
Common Stock issuable upon the excise thereof for its own account for
investment and not with the view to the distribution thereof except in
accordance with applicable federal and state securities laws. In addition, the
Note and Warrant will have customary legends regarding the nature of their sale
and issuance and restriction on transfer.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 4.1 Common Stock Registration Rights Agreement
dated as of June 3, 1998 by and between
Kennedy-Wilson, Inc. and FBR Asset Investment
Corporation.
Exhibit 10.1 Loan and Warrant Agreement dated June 3, 1998
by and between Kennedy-Wilson, Inc. and FBR
Asset Investment Corporation.
Exhibit 10.2 Promissory Note dated June 3, 1998 made by
Kennedy-Wilson, Inc. in favor of FBR Asset
Investment Corporation.
(b) Reports on Form 8-K
The registrant did not file any Reports on Form 8-K during the quarter
ended June 30, 1998.
The schedules to the Loan and Warrant Agreement attached as Exhibit
10.1 have been omitted. These schedules contain exceptions to the Company's
representations and warranties or documents which have been previously filed
with the Securities and Exchange Commission ("the Commission"). The Company
undertakes to furnish the omitted schedules to the Commission upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 14, 1998 KENNEDY-WILSON, INC.
----------------------------------------
Registrant
Date: August 14, 1998 /s/ FREEMAN A. LYLE
----------------------------------------
Freeman A. Lyle
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF OPERATIONS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND
NOTES THERETO.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 5,016,000
<SECURITIES> 0
<RECEIVABLES> 24,391,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 29,407,000
<PP&E> 83,844,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 113,251,000
<CURRENT-LIABILITIES> 3,295,000
<BONDS> 97,068,000
0
0
<COMMON> 40,000
<OTHER-SE> 12,848,000
<TOTAL-LIABILITY-AND-EQUITY> 113,251,000
<SALES> 0
<TOTAL-REVENUES> 10,856,000
<CGS> 0
<TOTAL-COSTS> 9,846,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,010,000
<INCOME-TAX> 134,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 876,000
<EPS-PRIMARY> 0.22
<EPS-DILUTED> 0.21
</TABLE>
